Nuclear liability law poses challenge to Indo-US N-deal

India's nuclear liability law posed a tough challenge for implementing the 'transformational' Indo-US nuclear deal though there is a very strong desire to move forward, Nisha Desai Biswal, President Barack Obama's Indian-American nominee for a key post in South Asia, said.

"I think that the 123 agreement was a transformational agreement between the relationship between the United States and India, she said at her confirmation hearing for the post of Assistant Secretary of State for South and Central Asia.

"But since that deal was enacted, I think that there has been very slow and halting progress because of the nuclear liability law in India and the hindrances that that has posed to advancing civil nuke cooperation," she said on Thursday.

If confirmed, Biswal, currently Assistant Administrator for Asia at the US Agency for International Development (USAID), will be the first Indian-American to be appointed as Assistant Secretary of State in the State Department.

"But I think it is going to be a political challenge for the Indians. And we look forward to working with them," Biswal, the daughter of first generation Indian-Americans, said.

She acknowledged that there is a "very strong desire" to move forward on this in India.

"I am hopeful, though, that we're making progress and that there seems to be some progress between Westinghouse and the Indian government and PCIL on approving a small contract.

"We're hopeful that that is something that can be announced in the near future and that that will pave the way for additional work in the months ahead," Biswal said hinting at the possibility of an announcement during Prime Minister Manmohan Singh's September 27 US visit.

"It is going to be a long and tough road to work through the issues with the nuclear liability law, but I think it's fundamentally in India's interests as well as in the interests of the United States to work through those issues so that we can progress with civil nuclear cooperation," she said in response to a question from Senator Tim Kaine, Chairman of the subcommittee on Near eastern and South and Central Affairs.

India's Civil Liability for Nuclear Damage Law allows the operator of a nuclear plant to seek damages from the supplier in case of a nuclear incident due to supply of equipment with latent and patent defects or sub-standard services. The US says the Indian law is not consistent with the Convention on Supplemental Compensation (CSC).